Can Time Spent Simultaneously Performing Exempt and Non-exempt Work Be Counted as Exempt?
In order to be properly classified as an exempt employee in California, the employee must spend the majority of his or her weekly work time performing exempt tasks. Thus, California's test for exemption has a very quantitative focus, a focus that is materially different than the "primary duty" test under the federal FLSA. One question that commonly arises in lawsuits challenging exempt status of managers in California is whether time spent by those managers concurrently performing exempt and non-exempt tasks qualifies as exempt work for purposes of the quantitative analysis. Take, for example, a retail manager who assists customers during a rush but continues oversight of the store and coaching and direction of subordinate employees at the same time. Is such concurrent work exempt, non-exempt or both? Yesterday, a California court held that the work cannot be both exempt and non-exempt nor partial time credit given to the exempt and non-exempt sides of the ledger. Instead, the court held that the trier of fact must determine the "primary purpose" of the work and consider whether that primary purpose falls on the exempt or non-exempt side of the ledger. The case is Heyen v. Safeway, Inc. and the decision is here.
In the Heyen case, the court's analysis led to an adverse decision for the employer. The plaintiff, a grocery store manager, claimed she spent the majority of her time on non-exempt work (cashiering, etc.) instead of management duties. Following trial, the court found liability and awarded the plaintiff overtime compensation. The employer said that the trial court erred in failing to consider time spent by the plaintiff concurrently managing while performing non-exempt tasks. The appellate court found no erro and held that based on the evidence, the trier of fact properly concluded that the work was for a primarily non-exempt purpose and thus, the employer did not get time credit for the employee's concurrent management duties.
This case serves as a reminder to California employers about the need to carefully review exempt classifications to ensure that exempt employees truly spend the majority of their work time on exempt tasks.